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S-Curves
In the Iirst three parts oI the series we have covered three static models oI the innovation management
theory: Schumpeter, the Incremental Radical dichotomy and the Henderson Clark model (iI you have
not you can click here to read part 1, part 2 or part 3).
Understanding these three theories will create a good (although not perIect) view regarding what
company will be in a better position to innovate and under what circumstances. One oI the Ilaws oI the
models, however, is that they do not predict when a technological discontinuity will take place, hence
why they are called static.
In this article I will introduce the S-curve Iramework, which is particularly useIul Ior analyzing
technological cycles and predicting the introduction, adoption and maturation oI innovations.
The S-Curve Framework
The S-Curve emerged as a mathematical model and was aIterwards applied to a variety oI Iields including
physics, biology and economics. It describes Ior example the development oI the embryo, the diIIusion oI
viruses, the utility gained by people as the number oI consumption choices increases, and so on.
In the innovation management Iield the S-Curve illustrates the introduction, growth and maturation oI
innovations as well as the technological cycles that most industries experience. In the early stages large
amounts oI money, eIIort and other resources are expended on the new technology but small perIormance
improvements are observed. Then, as the knowledge about the technology accumulates, progress becomes
more rapid. As soon as major technical obstacles are overcome and the innovation reaches a certain
adoption level an exponential growth will take place. During this phase relatively small increments oI
eIIort and resources will result in large perIormance gains. Finally, as the technology starts to approach its
physical limit, Iurther pushing the perIormance becomes increasingly diIIicult, as the Iigure below shows.
S-Curves http://innovationzen.com/blog/2006/08/17/innovation-management-th...
1 oI 5 09-10-2011 18:09
Consider the supercomputer industry, where the traditional architecture involved single microprocessors.
In the early stages oI this technology a huge amount oI money was spent in research and development,
and it required several years to produce the Iirst commercial prototype. Once the technology reached a
certain level oI development the know-how and expertise behind supercomputers started to spread,
boosting dramatically the speed at which those systems evolved. AIter some time, however,
microprocessors started to yield lower and lower perIormance gains Ior a given time/eIIort span,
suggesting that the technology was close to its physical limit (based on the ability to squeeze transistors in
the silicon waIer). In order to solve the problem supercomputer producers adopted a new architecture
composed oI many microprocessors working in parallel. This innovation created a new S-curve, shiIted to
the right oI the original one, with a higher perIormance limit (based instead on the capacity to co-ordinate
the work oI the single processors).
Usually the S-curve is represented as the variation oI perIormance in Iunction oI the time/eIIort. Probably
that is the most used metric because it is also the easiest to collect data Ior. This Iact does not imply,
however, that perIormance is more accurate than the other possible metrics, Ior instance the number oI
inventions, the level oI the overall research, or the proIitability associated with the innovation.
One must be careIul with the Iact that diIIerent perIormance parameters tend to be used over diIIerent
phases oI the innovation, as a result the outcomes may get mixed together, or one parameter will end up
inIluencing the outcome oI another. Civil aircraIt provides a good example, on early stages oI the industry
Iuel burn was a negligible parameter, and all the emphasis was on the speed aircraIts could achieve and iI
they would thus be able to get oII the ground saIely. Over the time, with the improvement oI the aircraIts
almost everyone was able to reach the minimum speed and to take oII, which made Iuel burn the main
parameter Ior assessing perIormance oI civil aircraIts.
Overall we can say that the S-Curve is a robust yet Ilexible Iramework to analyze the introduction, growth
and maturation oI innovations and to understand the technological cycles. The model also has plenty oI
empirical evidence, it was exhaustively studied within many industries including semiconductors,
telecommunications, hard drives, photocopiers, jet engines and so on.
Daniel Scocco Filed Under Innovation Theory
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